Oh, yeah, and the company boosted its dividend and announced a 7-for-1 stock split. All signs of a mature, serious company.

The headlines are favorable any way you look at them, and Apple’s stock is set for a big rally as a result. (It surged about 8% in after-market trading yesterday.) In the short term, anyway.

Longer term, Apple still faces very real problems.

Apple boosts buyback, earnings top forecasts

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So when investors are done setting off the fireworks and talking about the potential of Apple over the next few months, it may be worth looking to 2015 and beyond. Because when you explore the problems that lurk under the surface of this earnings report, it’s clear that the buy-and-hold crowd should be worried.

iPad sales drop sharply

In the previous quarter, “weak” iPhone sales overshadowed an otherwise strong earnings report. This time, investors were pleased as the smartphone bounced back with a forecast-topping 43.7 million iPhones sold, beating analysts’ estimates by over 5 million units. China, a new and growing market, helped.

The iPhone remains the biggest driver of short-term performance, with the device generating $26 billion of the $45.6 billion in total sales on the quarter for a huge 57% share of the top line.

But long term, the company is increasingly dependent on the iPad. And that segment is in trouble. Consensus estimates were for around 19.7 million iPads to be sold last quarter, up fractionally from 19.5 million last year.

In reality, Apple sold just 16.35 million iPads, a 16% decline.

That is ugly, given the fact that industry trends are still favorable. Even as the tablet market matures, research firm IDC still predicts a nearly 20% jump in device sales this year over last. The fact that Apple can’t even tap into the organic growth of this segment shows the big risk it faces from competitors.

That’s not just a concern for initial sales, but for the all-important upgrade cycle. Part of the reason the iPhone has been such a cash cow is because it can rely on loyal Apple customers to trade up.

Every iPad sale Apple loses now could mean deeper losses down the road, and the decline in Apple tablet sales shouldn’t be overlooked simply because iPhone sales bounced back.

Dividends and buybacks are getting expensive

Last quarter, Apple boasted $158.8 billion in cash and long-term investments, by my math. This quarter, that cash hoard dropped for the first time since 2008, to $150.6 billion.

Now, it’s not like Apple is going bankrupt with that kind of bankroll. But percentage-wise, the decline is a modest 5% and certainly worth noting. Put another way, that means in five years (20 quarters) that $158.8 billion would be completely gone.

Here’s where a bunch of you roll your eyes and say that five years is an eternity — and anyway, it’s unrealistic to expect that much dough to be drawn down consistently.

To that I say: “You do know Apple spent roughly $21 billion last quarter on dividends and buybacks over cash flow of just $13.5 billion, which adds up to a $7.5 billion gap … right?”

It’s very unlikely that Apple’s cash flow will grow $8 billion or so to cover that gap anytime in the near future. And also unlikely, given the grumblings of Mr. Icahn and other shareholders, that Apple will take the foot off the gas on its massive buyback and dividend scheme.

I mean, it was only April 2013 when Apple doubled its “capital return plan” via dividends and buybacks, pledging $100 billion through 2015. Not only did the company reaffirm that pledge to spend generously through 2015, but it actually just raised the price tag to $130 billion.

I guess Apple could float more debt, like it did in a massive $17 billion bond sale in 2013 … but what, you want to hold one of those every year?

Like I said at the onset, this is not a short-term concern at all, but if you’re a long-term investor, you better start paying attention to the numbers because the money for dividends and buybacks have to come from somewhere.

Why do you think the company only inched up its dividend a measly 8% despite, $3.05 to $3.29 per share, despite having $150 billion in the bank?

Answer: Because it can’t comfortably do much more than that based on the current balance sheet.

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